Under what circumstance is a vehicle classified as a total loss?

A vehicle is classified as a total loss when the cost to repair the damage exceeds the current market value of the vehicle. This assessment is typically made by an insurance adjuster who evaluates both the extent of the damages and the vehicle's worth before the incident.

In this case, determining total loss status based on repair costs exceeding the vehicle's value reflects the practical economic decision-making involved in auto insurance claims. If repairs would be disproportionately expensive compared to the vehicle’s value, the insurer usually opts to declare it a total loss, as it is more economical to pay the insured amount rather than invest in repairs.

Minimal damage would not justify a total loss classification, nor would simply being involved in an accident. Age alone, such as being over 10 years old, does not inherently dictate that a car is a total loss, as various factors contribute to a vehicle's valuation and condition.